A mortgage is the pledging of a property to a lender as a security for a mortgage loan. While a mortgage in itself is not a debt, it is evidence of a debt. It is a transfer of an interest in land, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the real estate when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.
Mortgage Types
There have probably never been more household mortgage options available than there are in the present time. And while Banks, Building Societies and Mortgage Lenders vie with eac%5B1%5D.jpg)
h other to offer more and more attractive packages to would-be purchasers, essentially there are two main types of mortgage, though combinations of the two are many and varied.
Repayment Mortgages
This is possibly the most generally recognised type of mortgage. The methodology is simple: repayments are made on a monthly basis and are inclusive of both the capital and interest elements. This type of mortgage is taken out for a specified period, which can be for any duration between five to thirty-five years, though more usually for around twenty-five years. There will also be a stipulation that life insurance is taken out to guarantee the full repayment of the mortgage in the event of the borrower’s death. Should payments continue to be made according to the terms of the contract, the mortgage will be fully redeemed at the end of the specified period and the ownership of the property will be assured. However, borrowers should be aware that during the early years, the repayments will be structured mainly towards repayment of the interest element of the loan and the capital will reduce only by a small proportion. The appeal of this type of mortgage is that it is totally transparent and should the borrower be content to allow it to run its full contractual course, then redemption will be automatic at the end of the fixed term of the life of the mortgage. Alternatively, should the borrower decide to sell the property within the earlier years of the contractual term, it is likely that very little of the capital element will have reduced. There may also be a charge made for early redemption of the mortgage.
Interest Only Mortgages
With this type of mortgage all repayments are taken up in paying only the interest element of the loan. This means that should the mortgage extend to the full term of the contract, then
no part of the capital amount will be reduced and ownership of the property cannot therefore be completed by the borrower. This may be useful if the objective of the borrower is to limit repayment to an absolute minimum for an initial short period of time, allowing financial consolidation until more favourable circumstances provide the opportunity to change the mortgage option. For the speculator this type of mortgage may also be seen as a means of entering the property market at a time when property is rapidly appreciating in value, thus allowing them to offset the increased appreciation in equity against the outstanding capital of the loan. The borrower may then decide to sell and redeem the loan in full, possibly even with profit. However, if the intent is to own the property outright, the borrower must institute an alternative plan for repayment of the capital element. Such plans can include setting up a savings option, or instituting an ISA, TESSA, pension, endowment or mortgage plan.
There have probably never been more household mortgage options available than there are in the present time. And while Banks, Building Societies and Mortgage Lenders vie with eac
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h other to offer more and more attractive packages to would-be purchasers, essentially there are two main types of mortgage, though combinations of the two are many and varied.Repayment Mortgages
This is possibly the most generally recognised type of mortgage. The methodology is simple: repayments are made on a monthly basis and are inclusive of both the capital and interest elements. This type of mortgage is taken out for a specified period, which can be for any duration between five to thirty-five years, though more usually for around twenty-five years. There will also be a stipulation that life insurance is taken out to guarantee the full repayment of the mortgage in the event of the borrower’s death. Should payments continue to be made according to the terms of the contract, the mortgage will be fully redeemed at the end of the specified period and the ownership of the property will be assured. However, borrowers should be aware that during the early years, the repayments will be structured mainly towards repayment of the interest element of the loan and the capital will reduce only by a small proportion. The appeal of this type of mortgage is that it is totally transparent and should the borrower be content to allow it to run its full contractual course, then redemption will be automatic at the end of the fixed term of the life of the mortgage. Alternatively, should the borrower decide to sell the property within the earlier years of the contractual term, it is likely that very little of the capital element will have reduced. There may also be a charge made for early redemption of the mortgage.
Interest Only Mortgages
With this type of mortgage all repayments are taken up in paying only the interest element of the loan. This means that should the mortgage extend to the full term of the contract, then
no part of the capital amount will be reduced and ownership of the property cannot therefore be completed by the borrower. This may be useful if the objective of the borrower is to limit repayment to an absolute minimum for an initial short period of time, allowing financial consolidation until more favourable circumstances provide the opportunity to change the mortgage option. For the speculator this type of mortgage may also be seen as a means of entering the property market at a time when property is rapidly appreciating in value, thus allowing them to offset the increased appreciation in equity against the outstanding capital of the loan. The borrower may then decide to sell and redeem the loan in full, possibly even with profit. However, if the intent is to own the property outright, the borrower must institute an alternative plan for repayment of the capital element. Such plans can include setting up a savings option, or instituting an ISA, TESSA, pension, endowment or mortgage plan. Product Types
First Time Buyer Mortgage Quotes
First Time Buyer Mortgage Products
As the housing m
arket continues to sustain higher property prices, with no immediate sign of any substantial fall, it has become increasingly difficult for the first-time buyer to secure that initial home. Traditionally mortgage lenders would expect a deposit of at least 10% before offering reasonable mortgage terms in return. But even at the very lowest end of the current market, the prospective homebuyer would need to raise funds in the region of £15,000-£25,000 to meet this restrictive criteria. For those at the beginning of a career, or perhaps already with a child or children, this first obstacle may seem overwhelming. But neither is the alternative prospect of long-term renting any more reassuring. In fact the cost of renting property may currently equal the cost of a monthly mortgage repayment, and quite often even exceed it.
Apart from this obvious disadvantage, the tenant’s position and rights would be unlikely to improve, and eventual ownership of the rented property would be out of the question. There might also be the very real possibility of having to vacate the rented property should the owner decide to sell or move back in. In short, there is little to recommend long-term renting, and it should be viewed only as a necessary and temporary expedient. And although the obstacles to buying that first property may seem initially very daunting, they can, of course, be overcome.
It has long been recognised that the huge potential of the first-time buyer to introduce new demand for their business is essential for continued growth in the mortgage-providing sector. And, as with any other market place, the business of providing mortgages has to respond to the needs and requirements of its customers. This is why the 10% deposit ceiling has now been more or less discarded, and many mortgage lenders are currently asking for deposits of as little as 3-5%, or, indeed, for no deposit at all in many case.
Innovative packages inviting the parents of prospective buyers to use their own homes as collateral in lieu of a deposit, of allowing friends to buy jointly or collectively and encouraging more single people to enter the property market are now widespread and mainstream. In fact many of the options open to the second or third time buyer are now available to the property newcomer, including lower rates, cash-back and outstanding loan consolidation. There are also mortgages available which offer to absorb the fees of surveyors, solicitors and the exceptional cost of initial home furnishing.
The amount which can be borrowed has also risen considerably. Many mortgage companies are now prepared to lend as much as five times the annual salary of the borrower, and some even more than that. There are also specific deals for graduates, where potential earnings are considered as part of the mortgage equation. And many highly reputable mortgage companies now operate a step-by-step service guide to assist prospective borrowers to negotiate all the various stages of the house-purchasing process. It is, of course, important to research all the various options available before entering into a contractual agreement. And it would be advisable for the any first-time buyer to seek reliable professional help in selecting the option which may be best suited to their particular needs and circumstances.
First Time Buyer Mortgage Quotes
First Time Buyer Mortgage Products
As the housing m
arket continues to sustain higher property prices, with no immediate sign of any substantial fall, it has become increasingly difficult for the first-time buyer to secure that initial home. Traditionally mortgage lenders would expect a deposit of at least 10% before offering reasonable mortgage terms in return. But even at the very lowest end of the current market, the prospective homebuyer would need to raise funds in the region of £15,000-£25,000 to meet this restrictive criteria. For those at the beginning of a career, or perhaps already with a child or children, this first obstacle may seem overwhelming. But neither is the alternative prospect of long-term renting any more reassuring. In fact the cost of renting property may currently equal the cost of a monthly mortgage repayment, and quite often even exceed it.Apart from this obvious disadvantage, the tenant’s position and rights would be unlikely to improve, and eventual ownership of the rented property would be out of the question. There might also be the very real possibility of having to vacate the rented property should the owner decide to sell or move back in. In short, there is little to recommend long-term renting, and it should be viewed only as a necessary and temporary expedient. And although the obstacles to buying that first property may seem initially very daunting, they can, of course, be overcome.
It has long been recognised that the huge potential of the first-time buyer to introduce new demand for their business is essential for continued growth in the mortgage-providing sector. And, as with any other market place, the business of providing mortgages has to respond to the needs and requirements of its customers. This is why the 10% deposit ceiling has now been more or less discarded, and many mortgage lenders are currently asking for deposits of as little as 3-5%, or, indeed, for no deposit at all in many case.
Innovative packages inviting the parents of prospective buyers to use their own homes as collateral in lieu of a deposit, of allowing friends to buy jointly or collectively and encouraging more single people to enter the property market are now widespread and mainstream. In fact many of the options open to the second or third time buyer are now available to the property newcomer, including lower rates, cash-back and outstanding loan consolidation. There are also mortgages available which offer to absorb the fees of surveyors, solicitors and the exceptional cost of initial home furnishing.
The amount which can be borrowed has also risen considerably. Many mortgage companies are now prepared to lend as much as five times the annual salary of the borrower, and some even more than that. There are also specific deals for graduates, where potential earnings are considered as part of the mortgage equation. And many highly reputable mortgage companies now operate a step-by-step service guide to assist prospective borrowers to negotiate all the various stages of the house-purchasing process. It is, of course, important to research all the various options available before entering into a contractual agreement. And it would be advisable for the any first-time buyer to seek reliable professional help in selecting the option which may be best suited to their particular needs and circumstances.
Remortgages and Remortgaging
Remortgage Products
Remortgaging, or changing the terms or lender of a current mortgage, may be considered for any number of reasons. The most conventional motive would be in order to terminate a mortgage, which is found to be unsatisfactory because the interest rates or repayments may be too high, or because the terms and conditions no longer meet the requirements of the home-buyer.
Remortgaging can also be a means of raising immediate cash for home improvement projects, or indeed for any unrelated substantial purchases the mortgage borrower may wish to make. But the borrower should be aware that in increasing the amount of the loan, the equity, or expected profit after the sale of the house and full repayment of the outstanding mortgage had been affected, would inevitably be reduced.
It is possible, and quite often most favourable to remortgage with the same lender. This can be done by extending the life of the existing mortgage in order to reduce the amount of the monthly outgoings, or for raising additional finance with the extra cost being absorbed into the monthly repayments over the long term. Conversely the homebuyer may be in an improved financial position and wish to reduce the capital more quickly and over a shorter period of time. It may also be that the borrower chooses to redeem, or pay off the outstanding mortgage altogether, before considering an entirely new mortgage. All these options can be easily negotiated.
However, the homebuyer should always be aware of any special terms and conditions, which are tied to the existing mortgage. Should the mortgage be relatively new, that is to say into the first or second year, there are liable to be certain penalties built into changing any part of the agreement, especially if short-term beneficial rates or offers had been taken up initially. If the borrower decided to switch mortgage companies altogether, then redemption must first be completed. Redemption simply means that the outstanding mortgage must be paid off in full before a mortgage with a different company can be secured. The new mortgage company usually makes this final payment, but there will generally be an additional redemption fee as a penalty for early completion and the inevitable loss of long-term interest to the lender. Many mortgage lenders may also charge an additional fee for standard closure as well as the redemption penalties.
It is imperative the borrower is fully aware of all the terms and conditions of the existing mortgage before deciding to move companies. Most reputable mortgage companies will give a redemption figure on request so that the borrower will be aware of the exact figure required at the stipulated time that redemption takes place. And, of course, there may be other initial fees should a transfer to another mortgage lender appear the best long-term option. This is because the new mortgage lender will insist on all the usual checks, including a survey, legal fees and searches, though many may be prepared to absorb these costs and add them to the overall lending to be recouped through slightly increased monthly repayments over an agreed term. But these are one-time only costs and may well be considered very reasonable if the links to a very expensive, restrictive mortgage, which may cost very much more throughout its lifetime, can be severed.
Remortgage Products
Remortgaging, or changing the terms or lender of a current mortgage, may be considered for any number of reasons. The most conventional motive would be in order to terminate a mortgage, which is found to be unsatisfactory because the interest rates or repayments may be too high, or because the terms and conditions no longer meet the requirements of the home-buyer.
Remortgaging can also be a means of raising immediate cash for home improvement projects, or indeed for any unrelated substantial purchases the mortgage borrower may wish to make. But the borrower should be aware that in increasing the amount of the loan, the equity, or expected profit after the sale of the house and full repayment of the outstanding mortgage had been affected, would inevitably be reduced.It is possible, and quite often most favourable to remortgage with the same lender. This can be done by extending the life of the existing mortgage in order to reduce the amount of the monthly outgoings, or for raising additional finance with the extra cost being absorbed into the monthly repayments over the long term. Conversely the homebuyer may be in an improved financial position and wish to reduce the capital more quickly and over a shorter period of time. It may also be that the borrower chooses to redeem, or pay off the outstanding mortgage altogether, before considering an entirely new mortgage. All these options can be easily negotiated.
However, the homebuyer should always be aware of any special terms and conditions, which are tied to the existing mortgage. Should the mortgage be relatively new, that is to say into the first or second year, there are liable to be certain penalties built into changing any part of the agreement, especially if short-term beneficial rates or offers had been taken up initially. If the borrower decided to switch mortgage companies altogether, then redemption must first be completed. Redemption simply means that the outstanding mortgage must be paid off in full before a mortgage with a different company can be secured. The new mortgage company usually makes this final payment, but there will generally be an additional redemption fee as a penalty for early completion and the inevitable loss of long-term interest to the lender. Many mortgage lenders may also charge an additional fee for standard closure as well as the redemption penalties.
It is imperative the borrower is fully aware of all the terms and conditions of the existing mortgage before deciding to move companies. Most reputable mortgage companies will give a redemption figure on request so that the borrower will be aware of the exact figure required at the stipulated time that redemption takes place. And, of course, there may be other initial fees should a transfer to another mortgage lender appear the best long-term option. This is because the new mortgage lender will insist on all the usual checks, including a survey, legal fees and searches, though many may be prepared to absorb these costs and add them to the overall lending to be recouped through slightly increased monthly repayments over an agreed term. But these are one-time only costs and may well be considered very reasonable if the links to a very expensive, restrictive mortgage, which may cost very much more throughout its lifetime, can be severed.
Buy to Let Mortgage Quotes
Buy to Let
Encouraged by the 1988 Housing Act which gave landlords much more control over their properties, the Buy-to-Let sector of the mortgage market has seen remarkable growth in recent years. And as house prices continue to maintain their current high value, it is seen as a very attractive means of investment with immediate visible return.
With an increasing availability of mortgage funds and lower and variable interest rates, for many the opportunity of buying property in order to let it out and at the same time retain overall ownership, has become an alternative to the once reliable, but now very precarious cash pension building plans. Quite often the amount of rental charged to tenants covers the whole cost of the monthly mortgage repayment on the house, and may even bring an initial profit. There is also the advantage, though possibly this is not the prime motive of the buyer, of providing much needed rental property at a time when housing stocks have been severely depleted, due in large part to the take up of Council House purchase.
The incentive to the buyer is to cover the cost of the mortgage without any, or very additional outlay, whilst allowing the value of the house to appreciate and the mortgage capital to reduce.
Success in this sphere is more likely if the location, facilities and building itself are attractive to tenants. And it is very important to research both the mortgage and property markets before embarking on a Buy-to-Let project. It is also essential that the legal responsibilities and rights of both landlords and tenants are thoroughly understood. Prospective buyers, who may not desire direct involvement with rental arrangements, may also consider the use of Letting or Leasing agencies who, for an agreed fee, will deal with any problems with tenants and monitor maintenance issues.
Simple, Fast, Commercial Mortgages
We have access to all commercial lenders ensuring you get the best deal. We are able to give a decision in principle within 48 hours and even have products for those with poor credit.
We arrange commercial mortgages of up to 70% loan to value in most cases, and up to 90% in some cases.
Bad Credit Mortgage Quotes
Dealing with CCJ's, Mortgage Arrears and Poor Credit
Unlike 25 years ago, it is no longer necessary to meet formal criteria befo
re applying for a mortgage. Then, mainstream lenders would hardly consider advancing a loan unless the applicant had held an account with a building society or bank for several years, could establish a long-term employment background and supply proof of being in a secure, stable relationship, preferably married. Single people, especially women were viewed as far too high a risk for lenders to even consider, particularly if a background of poor credit history existed.As society’s attitude has changed dramatically to the circumstances of individuals and to what was once the very real stigma of indebtedness, so too the mortgage lenders have altered their perspective on those borrowers who, for one reason or another, may have had a bad credit history and, as a result, a very low existing credit rating.Perhaps this came as a natural development of widespread credit availability, with manufacturers realising that not only could they sell goods more easily and in greater volume if they allowed customers extra time to pay, but they could also gain profit on the additional credit terms available.Mortgage lenders also began to realise that often bad debts were caused by circumstances or life events, such as divorce, illness, redundancy, increased self-employment and the abolition of student grants, rather than through any intrinsic financial unreliability in the individuals concerned. They realised too that, with the rigorous monitoring of financial statistics currently in existence, that in many cases the bad history may have been simply as a result of missing an occasional utility payment, which had led to a CCJ (County Court Judgement) being issued. And even bankruptcy, now becoming more and more widespread, was beginning to be seen as simply an acceptable expedient advised by an accountant in order to allow financial breathing space to a temporarily beleaguered business. But there was certainly sufficient proof to believe that it was possible to recover from these events and to re-establish good credit credentials.But for whatever reason, the mortgage industry could not fail to be aware that to cut out the growing sector of the population who, at one time or another, had fallen into debt, would be to operate in a very restrictive market indeed.As a result Adverse Credit mortgages and a whole range of services are now currently available to prospective borrowers, irrespective of any history of a poor financial background. In fact many well-known mortgage companies have now developed a dedicated portfolio of offers in order to the meet this growing demand. And even more are available through reputable mortgage brokerages.It is understandable, however, that mortgage companies inevitably take some added risk into consideration, and loan rates may not always be the same of those for lenders with unblemished credit history. Nevertheless, because of the level of competition in this area rates are still likely to be very competitive and any added restrictions should be negligible. There is, therefore, every likelihood that those with a poor or bad credit history will succeed in finding a lender who will agree satisfactory terms with regard to repayment.
International Mortgage Quotes
International Mortgages
According to a 2004 survey by the Prudential, upwards of 45% of British people have considered retiring abroad. That fact alone, even given that only a small percentage of those aspirations may ever be finally realised, indicates a very large market indeed. With the upsurge of low-cost competitive air travel providing easy accessibility to most countries of the world, it is hardly surprising that the expatriate communities continue to grow, especially in those warmer climates where living costs tend to be cheaper and property prices are so much lower. And it is as a natural response to these indicators, that a whole mortgage-related industry has risen up to meet the demands of those keen to invest in the foreign and international property market.
The methods of securing finance for the purchase of a foreign property are intrinsically the same as for buying property in the UK. The mortgage, which may be from a UK lender or from a lender in the country of purchase, must be secured against the property. Another approach may to be to free up the equity of an existing UK home or property, and, using a re-mortgaging facility, apply this balance to fund the purchase of the overseas property. Other mortgages may offer up to 95% LTV, or repayment on an interest-only basis.There are also offers of Buy-to-Let mortgages and tailored Expatriate Mortgages. Some companies even offer Foundation Mortgages for higher-income earners, as well as mortgages especially designed to meet the requirements of specific countries. In fact lenders’ options can be as variable for buying property abroad as the range of mortgages offered on UK properties. The mortgage can also be arranged in either sterling amounts or in the currency of the country in which the purchase is to take place.In the better established European countries favoured by expatriates, such as France, Spain and Portugal, more financial opportunities are likely to exist simply because of the lenders’ greater experience of property dealing in these regions. But there are organisations specialising in providing mortgages and mortgage advice for the more distant continents of America, Australia and Asia, in fact worldwide.But, as with any major financial transaction, there are inherent dangers of which the purchaser must be aware. For the UK prospective-buyer, safeguarded to some extent by the well-regulated workings of the domestic financial market, there are many more factors to be taken into consideration. Apart from risks of political instability in a particular region, fluctuations in exchange and currency rates and a lessening of enforced quality control in the actual construction of the buildings, there are the legal requirements of each individual country, which may differ enormously from those in the UK, to be carefully considered.And it is absolutely essential that the laws of the country regarding property ownership must be thoroughly understood. It is therefore suggested that before embarking on international property speculation, sound professional help and guidance be sought from a reliable and experienced source.
